Raising Seed Capital the Right Way

While seed funding is often the easiest round of funding to obtain, it’s also the foundation on which you’re building your entire business. Make sure it’s solid. Friends and family are second only to personal savings and credit when it comes to seed funding sources for startups.

While seed funding is often the easiest round of funding to obtain, it’s also the foundation on which you’re building your entire business. Make sure it’s solid. Friends and family are second only to personal savings and credit when it comes to seed funding sources for startups. And there’s a good reason for that. Investing in a startup with no financial statements, incomplete (or nonexistent) corporate structure, and no assets or intellectual property to speak of is the very definition of high risk. Who else is going to hand you the thousands to tens of thousands or more to get your company off the ground?

That’s why very few entrepreneurs can avoid relying on their personal networks for funding when first starting out. The key to making that work is to be deliberate, cautious and clear when setting expectations. Starting with a shaky foundation is setting yourself up for failure whether you’re talking code or organizing your company’s financing and legal structure. Here are the rules for making sure everyone’s on the same page.

Overvaluation is one of the biggest mistakes a startup can make and one that can really hurt friend and family investors in the long run. Appreneurs are optimistic by nature so it’s not surprising, but fixing overvaluation after the fact is difficult if not impossible. Research how much similar app startups are valued at and think about consulting an accountant or lawyer to estimate market rate. Start with comparables and conservative financial projections to determine a value and then test it.

Be Selective

That rich uncle might look like a juicy prospect, but if he’s never invested in a startup or is in an industry wholly unrelated to the mobile space or specific industry you’re targeting, you should cross him off your list now. Well-connected friends and family are worth their weight in gold and seed investors that will be stepping stones for follow-on financing will get you much further much faster. And don’t rush to set up meetings with anyone and everyone. Limiting your list to accredited investors–those who earn a minimum of $200,000 per year or have a net worth of at least $1M will also eliminate potential legal problems when it comes time for IPO.

Think Big Picture

Ask for help, not money. A modest investment is great, but connections are what can make your company grow long-term; if people are interested in investing, they’ll offer. If not, at least you’ll get them working on your behalf to generate other leads.

Offering preferred shares is a way to offer a higher return on investment in exchange for limited engagement. However, having a bunch of different investors with different kinds of shares can be incredibly difficult to manage, especially when you’re focused on launching and maintaining a business. Unless you have a background in finance or are experienced with those kinds of fee structures, it’s best to keep it simple. You can always add complexity later in the lifecycle of your company.

Convey Risk

You have a ton of confidence in your business concept–as you should–but, the fact is, 90% of startups never make it out of the seed phase. It is essential friends and family understand just how risky the investment is that they’re making because the last thing you want to do is jeopardize your relationships. There should always be a repayment plan or equity exchange in place, but consider straight-up asking them if they’re willing to lose their investment entirely. It’s a harsh reality of the seed stage.

Be Ready

You’ve gotten to “yes.” Now is the time to hire a professional. You should be prepared to provide all investors, including early-stage friends and family, with official, detailed and binding documentation about the investment structure. There’s no faster way to burn bridges than to hand out nothing more than a smile and a promise in exchange for seed capital. Treat your friends and family like the investors they are and, chances are, they’ll continue to be your champions as your company matures and grows.

ALCORMNA

Giants like Amazon, Google, Redbull, and H&M among others are such companies that have developed beyond their initial consumer bases by mastering their global business strategies of marketing. So, now the question is what these companies are doing out of the box that is leading them towards success.

A business will flounder without a funding source under its own debt the weight. A business runs on funding fuel. To attain funding, a business can take unusual avenues and more than one option can be used.

It has been observed that financing business startups is not so easy feat. If one can swing it, bootstrapping is the best option but no matter what, one will require small amount of money for turning idea into somewhat tangible. If funds are not rolling in yet, it’s hard to make a top notch product.

Today there is a huge amount of money in the market of start-up funding across all stages of funding. Although there are a lot of financing options for start-up businesses available but it’s up to the investor or the owner to decide which option is to be considered.

It has been observed that financing business start-ups is not so easy feat. If one can swing it, bootstrapping is the best option but no matter what, one will require small amount of money for turning idea into somewhat tangible

It has been observed that financing business start-ups is not so easy feat. If one can swing it, bootstrapping is the best option but no matter what, one will require small amount of money for turning idea into somewhat tangible

Debt financing is the cash to be repaid in the form of a line of credit, advance merchant cash, a loan, or a credit card. It involves the usual pitching to venture capital firms and investors for raising money in exchange for equity in the company.

Debt financing is the cash to be repaid in the form of a line of credit, advance merchant cash, a loan, or a credit card. It involves the usual pitching to venture capital firms and investors for raising money in exchange for equity in the company.

It is no surprise that in the current business climate of low or even sub-zero interest rates and arguably overpriced equity markets, investors are on the hunt for alternative avenues of investment. Injecting seed funding into promising young startups is one such investment that has recently grown to be very popular.

Like many professions, venture capitalists speak their own language. It’s easy to get lost in the lingo but it’s not too hard to learn some basic concepts. Here are Some Know More - http://bit.ly/2xMc1hG

Like many professions, venture capitalists speak their own language. It’s easy to get lost in the lingo but it’s not too hard to learn some basic concepts. Here are Some Know More - http://bit.ly/2xMc1hG

It is very essential that while starting your own business venture, you should properly plan before and then make required financial decisions. As in this way, you will be able to manage your money efficiently once your business starts operating. Starting a new business might bring uncertainty,

Now days, startup business owners are so desperate for tapping into the billions of pounds hovering around various establishments that they will definitely go to greater lengths for getting or presenting their business plan to the top investor.

Now days, startup business owners are so desperate for tapping into the billions of pounds hovering around various establishments that they will definitely go to greater lengths for getting or presenting their business plan to the top investor.

Many entrepreneurs think that the best and common form of raising money for their startup is equity financing. It involves the usual pitching to venture capital firms and investors for raising money in exchange for equity in company.

Many entrepreneurs think that the best and common form of raising money for their startup is equity financing. It involves the usual pitching to venture capital firms and investors for raising money in exchange for equity in company.

Nowadays, many giant organizations use business credit for growing and expanding in the global market. The most essential thing to understand is the advantages of business credit is available for other business and not for only big businesses.

Nowadays, many giant organizations use business credit for growing and expanding in the global market. The most essential thing to understand is the advantages of business credit is available for other business and not for only big businesses.

Noticeably, buying for selling cannot be a strategy to adopt for all-purpose work in public organizations. When an already acquired business, it does not make sense that it will definitely benefited with essential synergies of buyer’s business portfolio that already exists.

Noticeably, buying for selling cannot be a strategy to adopt for all-purpose work in public organizations. When an already acquired business, it does not make sense that it will definitely benefited with essential synergies of buyer’s business portfolio that already exists.

Working capital is believed to be the life line of companies that are based on product. Without the required working capital for purchasing materials, pay your employees, or do marketing of your products efficiently, one will find your new business venture.

Working capital is believed to be the life line of companies that are based on product. Without the required working capital for purchasing materials, pay your employees, or do marketing of your products efficiently, one will find your new business venture

Cash inflow is the lifeline of your start-up business and it comes from various sources such as receipt of a loan, interest on savings, payments from customers, monetary infusion from an investor, and investments.